An Interview with Rocky Patel

Rocky Patel, 47, has quickly become one of the best-known faces in the world of premium cigars.

Rocky Patel, 47, has quickly become one of the best-known faces in the world
of premium cigars. The owner of Rocky Patel Premium Cigars Inc. spends most
of his life on the road, either in the factories in Honduras and Nicaragua
that make his cigars, in the tobacco fields of Central America or in the
many cigar shops that sell his wares.

Recently, his 10th Anniversary smoke, the Rocky Patel Decade Torpedo, was
rated a classic, scoring 95 out of 100 points in Cigar Insider and Cigar
Aficionado tastings. In April, Patel sat down with senior editor David
Savona to speak about the impact of that rating, the impressive growth of
his company and his efforts to confront the challenges that face the
American cigar industry in the form of prohibition and exorbitant taxes.

David Savona: So let's just talk about where you are and where you've come
from. You're just coming off the success of the Decade. What's it like after
more than 10 years in the business?
Rocky Patel: It's actually our 12th year now. It took us a while to find
that perfect cigar to celebrate our 10-year anniversary, or decade, in the
business. In order to commemorate our 10 years, we came up with the blend
for the Decade. We probably went through about 120 different blends until I
finally said we've got a cigar that's got a lot of flavor, it's got spice,
richness, nuttiness, but balance. And we tried to do the same thing with
more of a Nicaraguan puro in the ITC 10 Year.

Q: Wasn't the blend that became the ITC 10 originally going to be your
Decade?
A: The original blend for the Decade was the ITC 10 Year. We liked that
because it had a lot of character, it had a lot of body, it had a lot of
spiciness. Then I came up with the blend we have now for the Decade, and
decided that the Decade had that elegance and that balance, so we kind of
flip-flopped. The original Decade was going to be the ITC, and the ITC was
going to be the Decade.

Q: So you reassessed, looking at where the cigars were, because the ITC is
pretty bold, while the Decade has a lot of finesse. Did you always intend to
have two?
A: Yeah, because we had two different lines. We originally started with the
Indian Tabac line, so we wanted to celebrate our 10 years with the ITC. And
the Rocky Patel line is really well balanced. I think the forte of Rocky
Patel cigars has been they deliver a lot of flavor, a lot of character. You
can smoke them to the nub and they don't get harsh, they don't get bitter.
They're just clean and well balanced.

Q: You've been doing this for 12 years. Compare the cigars you're making now
to the cigars you made 12 years ago.
A: Well, it's night and day. When I got into the business I actually didn't
really know that much about tobacco. It was a learning process. I had a
partner at the time who was making the cigars, and we were letting other
people completely make the cigars. About 1998 I took over the manufacturing
process, and that's when we kind of moved into the old Swisher facility,
which is the factory in El Paraíso [Honduras], and took complete control of
the fermentation of the tobacco, about the blending of the tobacco, the
manufacturing processes, the way the bunchers actually bunch the cigars, and
started buying tobacco, curing it and making our own blends. And that
transpired first at the [old] UST factory, where we launched the Vintage in
2002, and then from there progressed down to The Edge, the Sun Grown, the
Decade, Olde World Reserve and everything else.
It's been a learning process, a maturing process—every day is a learning
process with tobacco. The more and more time you spend with it, the more you
realize what you can do with cigars. You can literally have tobacco from the
same farm, ferment them in different processes and have them taste totally
different. There are so many variables in making a cigar; it's not only
where the seed is from, [but] the country of origin, the type of
fertilization, how you ferment it and then how you use that in the blends.
For example, last week I was in the [El Paraíso] factory, and we had to work
on some of the Olde World Reserve blends, because the tobacco that came out
of the rainy season was much milder than tobacco that comes out of the
summer season, so the ligeros end up being much stronger, so you have to
balance out the percentages sometimes so that cigars taste consistent.

Q: You mentioned having more control, but you still don't own your own
manufacturing facilities.
A: We don't. We're in the process of owning at least 50 percent of a
factory, if not a higher percentage, but we have complete control. We're
lucky to work with the Plasencia family where we have such a great
relationship, where they allow us to have our own employees in charge of the
fermentation, in charge of the construction. Certainly I make all the blends
myself—we have carte blanche at the factory, which is a nice thing.

Q: Did you think you'd get to this level? You started after the cigar boom,
when the market was saturated—not the best time to come into the cigar
market.
A: It was very difficult, and I didn't realize it would be so difficult to
acquire all the top materials. The key to our success has been to get great
quality wrapper, filler and binder. We deal with some of the biggest growers
in the world: Nestor Plasencia, we deal with ASP, the Oliva family—it took a
long time to gain the trust and acceptance of some of these major suppliers.
You build those relationships. I think it was based on [that] they saw we
were dedicated. Nobody ever thought we would make it. It was a hard
challenge. There were five, six, seven years where we weren't sure how far
we would get. We had to prove ourselves in order to get that acceptance.
When we first started we were making 150,000 cigars. Last year, we rolled a
little over 16 million cigars. It's been quite a rapid amount of growth,
especially from 1999 to 2000. We really had our big growth in the business
since we changed our name to Rocky Patel. At that point we were still only
making around 1.75 million cigars.

Q: When was the name change?
A: 2002.

Q: You made the name change for a couple of reasons. One of them was a
licensing conflict?
A: We had some licensing issues with Indian Motorcycle Co. But mainly when I
really felt comfortable that we had control over the manufacturing process,
and we were finally able to produce the quality of the cigars that we
envisioned, that's when I decided that it's time to put my name on the
cigar. Certainly '95 and '96 I had no idea what a great quality cigar was.
Your palate matures over time, and I would say it wasn't until '97, '98 that
my palate started developing.

Q: What was your first really groundbreaking quality cigar, that showed that
you were taking a step away from your origins in the cigar business? What
was your graduation cigar?
A: I think the graduation cigar had to be the [Indian Tabac] Super Fuerte.
It was one of the first rich, fuller-bodied cigars on the market. When we
came out with that cigar there weren't too many cigars with that boldness,
that richness, that character, all mixed in together. That was our
groundbreaking cigar.
Q: When was that released?
A: 1997. We got some great reviews on that cigar. And that was at a time
when we still didn't have control of our manufacturing, so that cigar was
not as consistent as we would have desired it to be. That cigar really took
off, then it started tapering off because of inconsistency. That's when we
decided we needed to have control of our manufacturing process, or that was
going to happen with every brand that we make regardless of how good the
brand is.

Q: I remember smoking some of the early ones, and they were great. But you
couldn't make it on a consistent basis?
A: We weren't getting the same wrapper, maybe it didn't have the same age,
or one of the binders would get changed without our knowing about it. We
realized we needed to have a large amount of tobacco, the same tobacco, of
whatever brand we make. Now we take that tobacco and we ferment it
ourselves, and sometimes we stop production on a particular line until a
tobacco is completely fermented, so the cigar stays consistent. For example,
we had to stop [production] on Decade for two months because the wrapper
needed fermentation.

Q: When did you stop production?
A: We stopped production on that in January. We started again [in late
March].

Q: So you learned that even though it's expensive to have a cigar off the
market, you don't want someone to get a cigar that doesn't live up to the
expectations.
A: The market is so sophisticated. The cigar smoker that buys our cigar is
so educated. It's better to make sure the cigar stays consistent. We've
really fought hard to keep that quality. It's easy to make a couple hundred
thousand cigars or 50,000 cigars, but when you start making two, three
million cigars in a particular blend, you have to have a lot of raw material
to make that. For example, in every single line we have, we have three
different categories. We have firsts, factory selects and seconds. The
firsts have a very strict standard of color. If the cigar is a little darker
or lighter, then the cigar becomes a factory select. The seconds have a few
extra blemishes, a few extra veins. We almost have 40 percent factory
selects and seconds, both in our Vintage and in our regular lines, such as
Decade.
Q: That sounds like an expensive process.
A: It is, but that's really been the key to our success. When people get our
cigars, they expect a certain standard.

Q: If you had one way to describe all your cigars, what would it be?
A: I think our cigars definitely deliver a ton of flavor, but at the same
time they're clean, elegant and balanced on the palate. I think the key to
success in making these types of blends is you have to have a big inventory
of tobaccos from all over. Right now, for example, we have filler from
Nicaragua in Estelí, Condega, Jalapa; in Honduras, Jamastran; Ecuador
Sumatra; Ecuador Connecticut; Panama; Brazil, so we have diverse amounts of
good tobacco, and the relationship we have with the Plasencias allows us to
get a lot of tobacco, because not only does [Nestor Plasencia] grow a lot of
tobacco, but he also contracts with farmers in some of those other
countries. So, because of these resources, we're able to make a larger
quantity and make diverse blends.

Q: But it's more than just your cigars—people also respond to you. I saw it
last year at the Las Vegas Big Smoke when you were up there with [Cigar
Aficionado senior features editor] Jack Bettridge. People like you.
A: Well, I think we're very sincere in what we do. They see the heartfelt
effort that we've gone through to build our brand. There's a reason we take
2,000 people a year down to the [El Paraíso] factory, 'cause I can talk
about all the things that we do till I'm blue in the face, but when they're
down there at the factory and farms and see what we do, that's impressive,
and they actually see the proof in the pudding when they smoke the cigars.
I've managed to build a lot of relationships, also visiting the cigar stores
throughout the country. And we're not only a cigar company, but we also do
have fun and enjoy life. We enjoy great Scotches, great wines. We like to
have a good time, we like to laugh. We're like the common man's cigarmaker,
and we treat everyone like a friend whether it's the CEO of a company or a
blue-collar worker. Whether it's cooking at the house, playing golf or
playing cards with them, we really interact, all of us—myself, my brother
Nish, [my cousin] Nimish—everybody that's associated with this company is
really in touch with the end consumer. We've built a bond that goes beyond
cigars.

Q: I would guess that you meet more cigar smokers than the typical owner of
a cigar company.
A: Definitely, 'cause we're out and about. We spend a lot of time and
effort. We're very diverse, and we get out and really socialize with our
consumers.

Q: Were you always an outgoing and friendly person?
A: Yeah, I grew up in a big family. Not immediate family, but tons of
cousins, lots of friends. I hate being alone. Let's say I come back from a
trip, three weeks on the road, the first thing I do when I get to my house
is throw my suitcases down, take a shower, and I'm out to the cigar bar.
Cigars build a friendship.

Q: What do cigar smokers say to you when they meet you?
A: It's interesting. I just look at myself as a regular person who is trying
to make a great cigar. There's nothing else I'd rather do. It's amazing to
me how they're kind of awed by it. I think they want to learn how you got
there, somebody from the outside who was an attorney. So they have a lot of
questions. And then they meet you and realize you're a regular Joe and they
like you even more.

Q: We've talked about this before, but you were an attorney, and didn't
really smoke cigars until a girlfriend introduced you to them. How do you go
from that to owning your own cigar company?
A: We were doing a lot of things in the movie business, and in the movie
business on the set you hurry up and wait, so I started smoking cigars. I
joined the Grand Havana Room [in Beverly Hills, California] because it was
close to my office. And that's where someone approached me to make cigars in
Honduras. It was an investment.

Q: You were just putting money into something.
A: I had a bigger vision and I wanted to make something out of this company,
and I spent a lot of time in Nicaragua and Honduras, asking a lot of dumb
questions and emulating the good qualities. And that's what took about five
or six years.

Q: Did you ever have a problem with people not taking you seriously? You
were a lawyer, had no background in the cigar business, you're not Cuban….
A: It was difficult, and that's what drove me even harder. Every day, I woke
up, looked in the mirror and said, "I'll show them." Everyone thought I'd
never make it, and they did frown at me. They laughed at me and said this is
just a guy trying to make a quick buck in the business. And the only way I
could show them is by outworking them and by doing my own thing—don't give
up. You have to look at your competition in whatever business you're in, see
what they're doing and try to do it better. I'm a dreamer, and I always
dream of new ideas, new concepts, new taste profiles, so we were always
progressive and took a chance. Making a real full-bodied cigar. When I came
out with The Edge, people laughed at me. A 100-count tray? A cigar with no
band? They said it would never sell.

Q: What was the biggest chance you took, besides becoming a cigar brand
owner?
A: First, the name change. Everybody in my office thought it was ridiculous
to put the name Rocky Patel on the brand. The second was the launching of
The Edge. People thought that was nuts. And then that we managed to grow
this company with independent reps. And nobody thought we could make a
consistent cigar with Nestor Plasencia. I said [to him], "There's no reason
with your pedigree, and the amount of tobacco you grow, that your name in
cigar making cannot be compared to some of the greatest people in the
business out there."

Q: Let's talk about the success of Decade. Obviously, the classic rating in
our magazine is a landmark achievement. It's something we don't give out
very often.
A: It's something I've dreamed of for a long time. As a cigarmaker, there's
many things you look for in gaining acceptance. Certainly one is to your
consumers—when they look you in the eye and say we love your cigar, and you
can track it by the amount of sales. And I look up to Cigar Aficionado, and
I strive personally to get a great rating, and on a consistent basis,
because that shows you that the cigar has been accepted by the connoisseurs.
I'm always working on a cigar to get to that level. For the Decade to get a
95, I'm very proud, and very happy.

Q: Were you surprised?
A: We knew we had a great cigar on our hands, and everybody who smoked it
thought it was a great cigar. So you never know till the rating is out, and
I didn't know until I got a phone call saying it got a 95, in Cigar Insider
[Cigar Aficionado 's sister publication] first.

Q: Best cigar you ever made?
A: Yes.
Q: What did that do, in terms of demand?
A: It's ironic that this rating came out at a time when we were out of boxes
in our warehouse. It does increase your demand, and you see the demand for
the cigar has gone up. To get a 95 is a classic rating—that's special.

Q: Is it a temptation to pump out more of them?
A: No, because that's what got us into trouble in the early '90s. When we
were a small company, we were worried about cash flow. We're in a position
now where we don't necessarily need that cash flow. We're looking to build
on our pedigree. We're better off taking our time and releasing the cigars
when we feel they're perfect.

Q: Your success has certainly gotten the attention of other companies in the
industry. Lately, there's been quite a bit of consolidation, foreign giants
especially. Have companies come looking for you, said, "Here's a check, what
do you say?"
A: Um, no they have not. I can honestly tell you nobody has approached us.
There are a lot of rumors. I get four or five phone calls a day saying "I
heard you've sold your company, you're selling your company," but certainly
that's not happened. Our vision is to keep making better cigars. It's nice
to have the independence to make a decision, to not go through umpteen
consultants. I'm happy to have that freedom.

Q: You work with your brother, your cousin. Ownership of the company, is it
yours?
A: I own the company. It is a family business, but I am the main shareholder
in the company.

Q: You have a partner?
A: We had a partner, but I bought him out four years ago. I own 95 percent
of the shares.

Q: Let's talk about expansion. Your main brands are made in Honduras, but
you recently started doing things with some smaller factories
in Nicaragua.
A: We have a wide array of tobacco, but sometimes you're limited by what
kind of flavor profile a factory makes. The fermentation can be similar. So
I decided to venture into Estelí, Nicaragua, and we spent about a year and a
half with a very small upstart factory that was making inexpensive bundle
cigars. We supplied them with good quality tobacco, we spent a year training
the bunchers and rollers, we put in draw-test machines, and I worked on many
blends. Hence we're making some private-label cigars from that factory,
we're making the ITC 10 Year there, we're making the Rocky Patel Summer
Collection there. We're making very special limited projects there.
Small-run cigars. We want to make sure we have fun while we make these
cigars. We're trying to create novel, fun options for the consumer
to smoke.

Q: Let's talk about some of the challenges facing the cigar market. You've
been instrumental in fighting for the rights of cigar smokers, especially
the SCHIP [State Children's Health Insurance Program] legislation.
A: My biggest fear when I put my head on my pillow at night is not market
share, it's not about growing the cigar company. My biggest fear is the
government, and with the stroke of a pen they can pretty much take away our
business or have a grave impact on it. We need to be a lot more alert about
some of the legislation that's coming down the pipeline. First there's the
SCHIP bill, where they were trying to impose a $10 tax on cigars, that we're
negotiating. That [proposed] tax is presently at $3—we're trying to get it
to 12.5 cents. The second impact is the FDA bill, where the surgeon general
at any time could have complete control on the taxation of cigars and about
what materials go into a cigar. There are many issues here from a
legislative standpoint, the biggest being the tax. I've been spending a lot
of time in Washington, because I spent a lot of time building this company
and I don't want to give it up.

Q: I'm sure some politicians equate cigars with Big Tobacco.
A: What I found is that most people on Capitol Hill were naive. They thought
only rich people smoke cigars. We showed them. It's an art form. It's a
tradition. When they realized this, and they see the art of cigar making, it
really opened up their eyes.

Q: Does it help when they see how a lot of the companies that would be
impacted by these bills are smaller companies?
A: Sure, it made a big difference. I had with me Jorge Padrón [of Padrón
Cigars], Robbie Levin [of Ashton], a lot of the smaller manufacturers,
telling the history, how long their families have been in business, on
retail and manufacturing, and how [the proposed legislation] has an impact
on many, many companies, and that story resonates.

Q: The first SCHIP legislation that was proposed called for up to a $10
federal excise tax on cigars [editor's note: the current federal excise tax
is capped at 5 cents per cigar], with a floor tax on retailers. Had that
gone through, unchanged, what would have happened to the premium cigar
industry?
A: It would have pretty much destroyed it. A cigar that retails for $5 would
retail for around $20. It's like buying a glass of wine for $8, and the next
day it's $25—you're not going to buy it. It certainly would have had a grave
impact on cigar sales, which would have resulted in far fewer sales of
cigars, and hence all the people in Honduras and the Dominican would have
been laid off. You have problems already with Chavez in Venezuela and the
Sandinistas in Nicaragua—more economic instability in these countries only
leads to opportunity for other leftist governments to come there, and adds
to immigration problems. It would have had a grave impact on our whole
industry.

Q: This is no exaggeration.
A: Yeah, and trust me, we were very close. If the president hadn't vetoed
this bill.... People need to be up in arms about it and talk to their
senators and congressmen, to show them we are not Big Tobacco, we're not
cigarettes. This is an art form, this is a culture. We don't have to have a
cigar, we're not addicted to them—we enjoy them, just like we enjoy a fine
glass of wine.